The Economic Value of Cultural Diversity: Evidence from U.S. Cities

Article Source: Journal of Economic Geography, Vol. 6:1, pp. 9-44, 2006
Publication Date:
Time to Read: 1 minute read
Written By:

 Gianmarco I.P. Ottaviano

Gianmarco I.P. Ottaviano

Search for the full article on Bing



U.S. cities that attracted immigrants experienced a significant increase in average wages and in housing values.


Policy Relevance:

Cities that implement immigration-friendly policies, as a way of attracting a variety of skills and highly educated immigrants, benefit from productivity increases at the local level and experience increases in housing values.


Key Takeaways:
  • This paper documents strong correlation: U.S.-born citizens living in metropolitan areas where the share of foreign-born increased between 1970 and 1990 experienced a significant increase in their wages and in the rental price of their housing.
  • As people and firms are mobile across cities in the long run, these correlations are consistent with a net positive effect of cultural diversity on the productivity of natives.
  • Cities with a more diverse set of skills are more productive, generate more jobs, and are more attractive to people who move there, resulting in a rise in the value of houses.



Giovanni Peri

About Giovanni Peri

Giovanni Peri is Professor of Economics at the University of California, Davis. Additionally, he is a Research Associate at the National Bureau of Economic Research in Cambridge, Massachusetts, and the founding director of the UC Davis Global Migration Center, an interdisciplinary research group focusing on international migrations. His research focuses on the impact of international migrations on labor markets and productivity of the receiving countries and on the determinants of international migrations.